Everyone
from CEOs to frontline workers commits preventable mistakes—for example,
underestimating how long it will take to finish a project or focusing too much
on information that supports their current view. It is extraordinarily
difficult to rewire the human brain to undo the patterns that lead to such
mistakes. But there is another approach: Alter the environment in ways that
encourage people to make decisions that lead to good outcomes. Leaders can do
this by restructuring how work is performed, say Harvard Business School’s John
Beshears and Francesca Gino. In this article, they offer a five-step process
for mitigating the effects of cognitive biases and low motivation on decision
making: 1. Understand the kinds of systematic errors people make and the
factors that affect motivation. 2. Define the problem to determine whether
behavioral issues are at play. 3. Diagnose the specific underlying causes. 4.
Design a way to tweak the environment to reduce or mitigate the negative impact
of cognitive biases and insufficient motivation on decisions. 5. Rigorously
test the proposed solution. INSETS: Common Biases That Affect Business
Decisions;Test Your Thinking. [ABSTRACT FROM AUTHOR]